The Battle Over Business Interruption Insurance Heats Up Amid COVID-19 pandemic
Many of our customers are business owners who are responsible not only for the success of their establishments, but for the livelihoods of their employees. As the COVID-19 pandemic progresses, we in the insurance industry are meeting your needs head on. To give you an idea of the rapidly changing landscape the entire business world finds itself, this article from ProgramBusiness.com will shed a little bit of light on what you and many other business owners are facing.
In short, businesses across the U.S. are asking if their insurance policies will provide “loss of business” coverage associated with COVID-19. Shutdowns and slowdowns are not covered by Business Interruption insurance which is triggered by direct physical loss or damage as the result of a covered cause of loss (e.g., fire, explosion, wind, etc.). The actual or possible presence of a virus does not fit that definition.
The potential losses to small businesses alone would quickly consume the surplus U.S. insurers have for claims payouts that have been legitimately paid for (e.g., following a major hurricane). It would threaten the solvency and impair the ability to pay ANY business for ANY claim.
Insurance trade groups are discussing the possibility of designing a federal program that could direct money to affected businesses via the insurance industry. Such a program would be patterned after the September 11th Victim Compensation Fund — that would make assistance available to all businesses.